The food truck industry in the United States has grown by 7.5% between 2016 and 2021. There are now 26,228 food trucks scattered all over the country, with total reported revenue of around $1 billion per year. If you are a budding entrepreneur looking for a business linked to food, then a food truck may be the best option for you. It is comparably cheaper than putting up a restaurant, and it gives you the flexibility to move around.
Determine Your Concept
The first thing that you need to do is to identify the concept of your food truck. This is the starting point of your business, and any decision you will make moving forward will revolve around this concept. You can begin by taking a good look at your community.
You have to identify the existing competition and how it will affect your potential business. What cuisine are they offering, and what can you bring to the community that is different from what’s already there?
You also need to identify the demographics and your potential client pool. Will you be catering to the needs of young people, families, or both? What is the busiest street that has the most people, and at what time of the day? These are the questions that will help you build and finalize your concept.
Make a Business Plan
Now that you already know your concept, the next thing to do is to write up a business plan. It will help you determine your goals, time frame, and every detail related to your business. This is also the same document that you would present in case you decide to look for investors. Your business plan should contain basic information such as:
- Executive Summary — This should state your company’s name, business goals, and the type of food you plan to sell.
- Company Description — This is why you chose this industry and what sets you apart from your competitors.
- Market Analysis — This should have your target audience and demographic.
- Management and Organization Plan — This should show the structure of your business, including your employees.
- Product Line or Service Description — This should present your menu and seasonal foods or alterations.
- Sales and Marketing Strategy — This should have your advertising plan and different tactics to market your business.
- Funding Request — This should show where you get the capital and how you plan to sustain the operation of your food truck.
- Financial Projection — This should present your expected financial growth in the next five years.
- Appendix — You can include additional information like your logo, design, theme, and blueprints.
Get the Necessary Permits and Licenses
Licenses may differ based on which city and state you’re in, but you can always check with your local Chambers of Commerce, Department of Motor Vehicles (DMV), and Health Department for a list of the requirements. Generally speaking, you will need a business license to operate legally, and you can check the requirements on the website of the U.S. Small Business Administration. A business license for a food truck can cost you somewhere between $50 to $500.
Another important document that you should have is the Employer Identification Number (EIN). It is a set of federal tax ID numbers that register your business to the IRS database. The EIN is also one of the requirements you need to submit when applying for a business bank account. Other permits that you should have are:
- Driver’s License
- Food Handler’s Permit
- Health Department Permit
- Seller’s Permit
- Fire Certificates
- Parking Permits
- Commissary Letter of Agreement
- Special Event Permit
You would also need food truck insurance which costs roughly $2,000 to $4,000 per year. The coverage varies depending on the type of plan. Still, in general, a food truck general liability insurance provides you protection for any illnesses related to food poisoning, cuts from metal or glassware, and contaminated food.
Buy Your Food Truck
You will need a truck big enough to house your basic cooking equipment and has enough space for you and at least one employee to move around. The cost of a truck is different depending on your location, but in the Bay Area, the cheapest truck that you can get is around $50,000. If you want a fully customized food truck, the price can easily go up to $200,000 or more.
Invest in Good Equipment
Good equipment doesn’t necessarily mean buying industrial, heavy-duty commercial appliances. Those are expensive and are often used by medium to large restaurants. Since you are just starting up, you need to be careful with your budget. Residential appliances are cheaper compared to their commercial counterparts and can serve almost the same purpose.
You can begin by buying a two-door refrigerator, a basic range with at least four burners, and an oven. Some of the manufacturers that produce the best appliances that can keep up with your needs are General Electric, Samsung, and Whirlpool. They are affordable, and there are tons of companies that offer appliance repair and maintenance for these mainstream brands.
Food trucks are now the latest trend in the food industry. They are hip and unique and provide no-hassle access to good food for those looking for a delicious meal on the street.